Good morning (over here), Keith, You raise the question of how desperate the US government may be. A friend recently asked me for comments on an interview with Thomas Sowell, an American academic now 80 and retired. The interview may be found at http://fora.tv/2010/08/06/Uncommon_Knowledge_Thomas_Sowell_on_Dismantling_America#fullprogram
The following are the comments I sent to my friend: Hi Friend: I said that I'd give you further thoughts on the Thomas Sowell interview, and here they are. The interview gives me a chance to put some of my own thoughts in order. First, one has to understand where Sowell is coming from. As a kid, he was a highschool dropout, but bright enough to get into Harvard after fighting in the Korean War. He did his doctorate in economics at the University of Chicago, which at the time was, and may still be, the very centre of right wing economics based on the "Austrian School" thinking of people like Ludwig Von Mises, Friedrich Hayek and Milton Friedman. The Austrian School's central argument is that the market must be left alone to operate with complete freedom. Government must not interfere with it. If there is a depression or recession, the market can be expected to readjust on its own without government intervention. The opposite argument, initially put forward by John Maynard Keynes in the depression of the 1930s, and generally accepted in some form by most economists today, is that the market may not make the necessary corrections on its own and government may therefore have to intervene to help it do so. What I felt was most disturbing about the interview is a lack of recognition of the fact that the American polity and economy are in a terrible state right now. The following kinds of things were simply glossed over: a.. The US is deeply in debt both in foreign and domestic terms partly, and perhaps largely, because of its huge international military undertakings. b.. The unemployment rate is very high. Officially it stands close to 10%, but if people who have simply stopped looking for work because their chances of finding it are zero are factored in, it may be as high as 16% to 20%. A major problem is that jobs which Americans did just a few years ago have been packaged up and sent en masse to Asia, where labour is much cheaper. Unions able to protect the rights of workers have almost become a thing of the past. c.. Since the 1970s and especially since Reagan's tax breaks for the rich, the incomes of the wealthiest Americans have surged enormously, while the incomes of poorer Americans has stayed about the same. Much of the middle class has eroded away. d.. Manufacturing which was the mainstay of the US economy is being displaced by FIRE (finance, insurance and real estate). The FIRE industries tend not to operate openly, but in shut away offices connected by the Internet. What harm they can do has been demonstrated by the sub-prime mortgage crisis of recent years. e.. Perhaps worst of all in terms of threats to democracy, many American politicians are increasingly being financed by business interests, which makes them lobbyists rather than representatives of the people. This has been aided and abetted by a recent Supreme Court ruling that puts no limits on the amounts that private companies can donate to election campaigns. f.. And, though you may not agree, religion has tended to move out of the little church on the corner and to morph into business, often big business. No wonder people are marching around, some with guns, trumpeting the need to adhere to the Constitution, a document that few of them really understand. It's a mess, and it's no wonder people are confused and angry, and confused and angry people need someone to blame. Who's to blame? Why government of course. What was really sad about the Robinson - Sowell interview was that the whole mess that Sowell had identified in his book was to be laid on Obama. When Robinson asked Sowell what Obama should do, Sowell said that Obama should resign. What wasn't recognized is that Obama and his team had been doing everything they could to pull the US out of its recession and bring some stability back into the economy. It may not happen, but they are trying. And the problems now affecting the US may be partly, even largely, the fault of past governments (Reagan's tax cuts, G.W. Bush's need to "git Saddam and Osama") but not the fault of the government that has inherited the mess. Also quite sad was Sowell's deprecation of things like community activism and universal health care. He took issue with Obama's health care act partly because he believes people should pay for their own health care even if they can't afford it, but also because it was some 2,000 pages long. He didn't seem to recognize that it's length had a lot to do with the huge number of amendments that were made to it in order to get it though both Congressional houses. As for community activists, surely he would have seen them do some good things when he was a kid in Harlem. He might also have recognized that, with the employment rate as high as it is in the US, activists may be badly needed as a counterforce to kids doing things like forming drug gangs, etc. I really wonder where the US is going with its Tea Party and heroes like Sarah Palin and Glenn Beck. Perhaps it'll shake it all off and rise again. I certainly hope so because I've known a lot of Americans who were wonderful people and don't deserve the kind of crap that's blowing around them. And thank you for this opportunity to get my thoughts together. You may not agree with them, but that's not my problem. Ed ----- Original Message ----- From: Keith Hudson To: RE-DESIGNING WORK, INCOME DISTRIBUTION, ,EDUCATION Sent: Saturday, October 23, 2010 2:33 AM Subject: [Futurework] Having a good night's sleep Just how desperate is the American government? Desperate? Very desperate? Very very desperate? We already knew that the US Treasury Department was desperate from the way that Tim Geithner, its Chief Secretary, has been sounding off at China in recent months. Never mind that a significant proportion of China's export surpluses with America are, in fact, the profits of American corporations in China. We could say that Tim Geithner is very desperate because the present week-end meeting of international finance ministers and central bank governors (in preparation for next month's G20 in Seoul) has already started in South Korea with an all-night session. Never mind that the judgement of half of the attenders must be badly affected by jet-lag, President Obama needs to know as soon as possible. He would love to be able to announce the deliverance of a "new world currency order" (though not a new world currency!) in time for the Congressional elections on 2 November as well as a "done and dusted" agreement to place before Prime Ministers at the actual G20 meeting in Seoul on 11-12 November. We could say that Tim Geithner is very very desperate because the US dollar now has every sign of starting a double-dip all of its own. And once that happens then the present "currency war" will become a currency chaos which would make the 1930s Great Depression seem like a stroll in the park. Needless to say, America's "solution" is also very very desperate. It wants to put a limit of the export earnings of any one country -- supervised by the IMF, its own special creation and friend. In fact, the solution is very very absurd because it doesn't have a chance of being agreed by countries such as China, India, Russia, Japan, Germany, Brazil and many other smaller countries that are trying to hoist their economies up to American/European standards. The American dollar was able to dominate the currencies of the rest of the world after the summit at Mount Washington Hotel, Bretton Woods in 1944 -- when the end of World War 2 was in sight -- because America was the only vibrant economy in the world at that time. The European Allies were bankrupt, Germany and Japan were destined for imminent physical, as well as financial, destruction, China was well-nigh destroying itself in its own internal war between the communists and the nationalists, Russia was sending the cream of its intellectuals to the gulags, and India was struggling to regain its independence from the British. This time, however, America is not the predominant power in the world. No country is. If America wants a "new world order" -- as prematurely announced by President Bush Senior in 1991 -- then it will have to be created by the new world in conjunction with America. Perhaps we'll know tomorrow when Tim Geithner has had a good night's sleep -- one hopes -- and can listen carefully to what China, Brazil and other countries have to say. I don't suppose they'd have any objection to the dollar remaining pre-eminent, so long as it's a stable World dollar and not a fast-depreciating American dollar. Keith Keith Hudson, Saltford, England ------------------------------------------------------------------------------ _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
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